PHOTO: The Ecoluxe Lodge, viewed from the Riverwalk Trail. Photo by Cynda Green.
The Whittington family, out of Albuquerque, NM, purchased The Springs Resort in 2005, from local owners Bill Dawson and Matt Mees. Based on the Assessor’s records, it appears the purchase price was $2.5 million.
A few years later, the Resort took on a major resort expansion with the construction of the Ecoluxe Lodge. The project included additional geothermal soaking pools, and — although the Resort has its own geothermal water rights — the Whittington family decided to seek additional hot water from the Town of Pagosa Springs.
Following months of negotiations and legal challenges to the proposed water transfer, the Town agreed in 2009 to provide the lion’s share of raw geothermal water from its “municipal heating system” to The Springs Resort. Then-Town Manager David Mitchem worked up a “Geothermal Water Tap and Economic Development Agreement” to encourage the development to move forward. You can download the agreement here.
Mr. Mitchem had been hired as Town Manager based on his supposed expertise in “economic development” — which can be defined as government providing taxpayer subsidies to private companies, to encourage them to build or expand businesses they probably would have built or expanded without any subsidies — and then, the government taking credit for making it happen. Mr. Mitchem had come onboard just as the Pagosa Springs economy was spiraling down the toilet during the Great Recession, and as a result, he saw almost no economic development take place during his tenure, in spite of his supposed expertise. The Ecoluxe Lodge (which was planned prior to Mr. Mitchem’s arrival) was one of the only projects for which he was able to claim credit.
I want to repeat a couple of points that I touched on yesterday.
In 1988, Water Judge A. H. Haas had granted the Town of Pagosa Springs the right to extract geothermal water from the community’s shared underground aquifer at a rate of up to 450 gallons per minute, for a specific beneficial purpose: “municipal use associated with geothermal heating”. The decree specified that the water could be extracted from the Pagosa aquifer “during the winter heating season”, roughly October through April.
As mentioned previously, the Colorado Constitution defines water as a publicly-owned resource, and a water user desiring to protect and defend a particular water use must prove that the water can and will be used… and must specify the location at which the water will be diverted… the beneficial purpose to which it will be put… and where any unused water will be returned to the public water supply.
In the case of the Town’s new municipal heating system, funded largely by the U.S. Department of Energy, the geothermal water was clearly intended for a “municipal heating system” — part of the federal government’s attempt to reduce our dependence on foreign oil.
I’ve been writing about, and researching, municipal governments for the past 20 years, and all that time, I thought I understood what the term “municipal” meant. I was greatly surprised that our elected Town Council believed that supplying up to 450 GPM of publicly-owned geothermal water to a private motel complex — year round, for tourist soaking pools — could be defined as a part of a winter-time “municipal heating system”.
As far as I could tell, Mr. Mitchem and the Town Council were abusing our decreed water right. But of course, I’m not a lawyer. I’m only a taxpayer. The lawyers working for the Town and for the Resort were perfectly fine with the agreement.
As the Tap Agreement was written, The Springs Resort would use the water from the Town’s PS-5 well to heat its rooms, and then, when they were done heating the rooms, they were allowed to run the ‘waste water’ through their mineral baths. Of course, the rooms would need only minimal heating during the summer tourist season, so there would be plenty of hot water for bathing.
To put 450 GPM into perspective, the Pgosa Area Water and Sanitation District (PAWSD) treats the equivalent of about three times that about, to serve the entire district with drinking water.
Reportedly, the Resort has been paying for all this beneficial water, according to the Tap Agreement.
b) For the period from January 1, 2010 until December 31, 2018, if the Corporation determines to continue receiving the Springs Resort Tap Water, the Corporation may elect to pay the Town periodic payments (currently quarterly) at standardized market rates established by the Town, or pay a fixed tap fee of $75,021 in lieu of periodic user fees or charges…
(c) For the period from January 1, 2019 until December 31, 2023, if the Corporation determines to continue receiving the Springs Resort Tap Water, the Corporation may elect to pay the Town periodic payments (currently quarterly) at standardized market rates established by the Town, or pay a fixed tap fee of $41,679 in lieu of periodic user fees or charges…
(e) Beginning January 1, 2024 and thereafter service fees and charges shall be based on standardized market rates established by the Town for taps supplied raw Geothermal Water by the Town.
(f) The Corporation shall maintain and furnish to the Town records of the use of the Springs Resort Tap Water, by purpose and amount, as may be reasonably required by the Town.
I find it interesting that the Town apparently has the option to set new “standardized market rates” for the geothermal water next month.
Whether the use of the Town’s municipal water to heat soaking pools is legal, seems moot at this point. Water under the bridge, so to speak.
But I’ve been watching the construction of eight new soaking pools along the river, downstream from the Ecoluxe Lodge, and near the new hotel project under construction.
Will the Resort be expecting even more geothermal water from the Town?
Does that have implications for all the other Geothermal Heating System customers?
Bill Hudson began sharing his opinions in the Pagosa Daily Post in 2004 and can’t seem to break the habit. He claims that, in Pagosa Springs, opinions are like pickup trucks: everybody has one.